The political economy of distribution in developing countries: A rent-seeking approach

Economic development in many Third World countries after independence has been biased in the sense that some, mainly urban, social groups have gained much more than the majority of the population who lives in rural areas or urban shantytowns. That bias is to a large extent caused by government policy and, accordingly, by an uneven distribution of political influence. This paper contains an analytical model reflecting the bias in the distribution of the benefits and costs of public sector activities, where those activities are determined by the distribution of political influence. The main elements of the distribution of political influence are determined in a rent-seeking game between society' different social groups.     

Tempus Fugit

SUMMARY

This study examines campaign schedules from a sample of congressional and legislative candidates in Texas in the November 2002 general election. The schedules show that candidates focus most of their time on voter contact activities, followed by political activities. Despite expectations, fund raising is not the most common activity on campaigns. The data further demonstrate that congressional candidates spend much more time on the campaign trail than state legislative candidates, and a great deal more time raising money. Also, candidates in rural districts spend a greater proportion of their time on political activities, while urban and suburban candidates focus more attention on fund raising. The structure of these different types of districts seems to provide campaigns with different avenues of most efficiently contacting voters.     

The Politics of Innovation in State Courts: The Merit Plan of Judicial Selection

A potentially fruitful but partially explored dimension of thestudy of state policy innovations concerns the patterns of reformin the organization, structure, and personnel of state courtsystems. This study considers the adoption of merit judicialselection by nearly half of the states during the 1960s and1970s. Specific attention is given to testing the hypothesisadvanced by prior research that the Merit Plan was a strategicinitiative launched by rural political interests in responseto the threatened growth of urban political power in the wakeof reapportionment. Empirical evidence concerning the circumstancesof the reform campaigns that produced the Plan, the patternsof legislative sponsorship, and the nature of voter supportsuggest, however, that the political base for the Merit Planand associated court reforms has been in urban areas. The implicationsof the findings for future inquiry into the patterns of court-relatedinnovations are then explored.     

Local government grants and income tax revenue: Redistributive politics in Norway 1900–1990

An important aspect of the welfare state is public provision of private goods, primarily education and health care. In Norway the provision of these services has been organized through the local public sector. The development of the welfare state has to a large extent been the development of welfare communes. The important revenue sources of the local and county governments, grants and income tax revenue, have been controlled nationally, and the paper addresses the determinants of these revenues during 1900–1990. The approach combines a demand model of local public services emphasizing price and income-elasticities with a political economy model of central government ideology and strength. The decision making is understood as bargaining between the government and interest groups, and the political structure consequently is of importance for the policy outcome. The analysis shows how politics matter, and the results indicate that a minority coalition government implies 30% more grant and income tax revenue to local and county governments than one party majority in the long run.     

Do supermajority rules limit or enhance majority tyranny? evidence from the US States, 1960–1997

Buchanan and Tullock (1962) demonstrates that supermajority rules can reduce tyranny of majority problems in a democracy. However, recent theoretical work by Dixit, Grossman, and Gul (2000) postulates that this static analysis of supermajority rules may be inadequate to explain political decisions in a dynamic setting. In fact, supermajority rules may increase the incidence of majority tyranny because of rotating political representation. Using data from US state legislatures we examine the effect of supermajority rules on different categories of government expenditures and tax revenues during the latter half of the 20th century. We find supermajority rules have little effect on general government expenditures and tax revenues. However, supermajority rules are associated with lower public welfare transfers, which supports the traditional analysis of the fiscal effects of supermajority rules.     

Repositioning urban bias: Non-state providers' use of spatialised networks in Bangladesh

Urban bias theory predicts urban areas of developing countries receive disproportionately more resources than rural areas due to their concentration of numerically large, politically important “vote banks.” This has not been the case in Bangladesh. This study finds that this variation occurs due to non-state providers (NSPs) changing the landscape of resource allocation. Operating on the premise that state control leads to more services in urban areas, urban bias fails to account for NSPs as critical service providers. Employing a grounded theory strategy to explore urban-rural dynamics in service provision and to build on urban bias theory, this research highlights interactions between state and non-state actors. It argues that spatialized political networks, networks of formal and informal leadership more difficult to access in urban areas, influence the locality of service provision. Though NSPs recognize increased need in urban areas of Bangladesh, their interventions in those areas remain peripheral due to differing structures of government accountability and differing levels of community acceptance facilitating these networks. The need for NSPs to adapt their activities to restrictive governance mechanisms reflects the changing space for NSPs in the context of semi-democratic regimes.     

Centralization of school finance in Michigan

School finance reform in Michigan involved centralization (at the state level) of spending decisions about schools, a large tax shift (mostly from property to sales), and a small tax cut. The changes came about after two decades of failed attempts to reduce property taxes in the state, and were the immediate result of an unlikely piece of legislation that abolished all funding for public schools. Unlike most centralized systems, foundation grants in Michigan differ by district. Distributionally, the reforms favor residents of small, rural districts (whose spending was increased sharply). Residents of poorer urban areas, including Detroit, lost net income as a result of the reforms, as did residents of some of the richest suburbs in the state. Michigan permits a number of districts to supplement their foundation grants by limited amounts, a strategy that we argue may be a promising way of combining the efficiency benefits of local control with the equity benefits of foundation grant systems.     

The Left's New Urbanism

The idea of suburbia, or the suburban, or the suburbs, can imply a number of different things. Suburbia suggests a physical place, in general the outskirts of a city or large town; suburban can infer a certain lifestyle; and the idea of the suburbs is often used to identify a community or class of people who inhabit a specific territory. In politics, these terms can also retain various meanings in terms of geography, culture or community. Alongside the ideas of the urban or the rural, they are often used to debate questions of political strategy and shifting electoral coalitions. In this article, ideas of urban and suburban places, cultures and communities are used to consider wider debate regarding future coalitions and strategy within the modern left, specifically a renewed urban politics that can be identified. This new ‘urbanism’ suggests a geographical realignment—partly on cultural or lifestyle grounds—which is significant within an overall attempt to redefine the ‘base’ of the left in terms of class and community. This article considers these issues with reference to what historically has been described as the ‘Progressive Dilemma’.     

Tax earmarking, party politics and gubernatorial veto: theory and evidence from US states

This paper provides a theory of earmarking based on the relative power of a legislature and executive. The politically powerful use earmarking as a means of resolving uncertainty and insulating preferred policy from the reach of future government. Tax revenue will be earmarked more often when political power is unified under one party or when a party has the legislative majority needed to overturn a gubernatorial veto. An empirical test of the theoretical predictions are conducted using a panel of data for US states. A state with a legislature controlled by a single party with a large enough majority to overturn a gubernatorial veto will earmark 5% more of its tax revenue than other states and a state with a unified government will earmark 6.5% more. Together these explain 18.5% of the observed decrease in the percentage of state tax revenues earmarked from 1954 to 1997.     

Geographical redistribution with disproportional representation: a politico-economic model of Norwegian road projects

Politicians bias public policies to favor particular election districts. According to the traditional common pool model, districts facing low tax shares should receive relatively large government projects. We suggest a swing-voter model where the number of voters on the ideological cut point, lack of party identification and number of district representatives per voter determine project sizes. We analyze the allocation of state road investments in Norway from 1973–1997 exploiting unique data on characteristics of voters, legislative representation and tax prices in 19 election districts. Geographical representation to parliament is biased, mostly due to an ancient constitution. Shares of swing voters and legislative over-representation lead to higher levels of road investments, while high levels of party identification reduce investments.     

解决"三农"问题与深化体制改革

"三农"问题说到底是农民收入问题.农民收入增加难,源于体制性障碍.为了实现农民增收减负的目标,必须深化体制改革,包括城乡二元制度改革、农村税制改革、财政投资体制改革、粮食流通体制改革、土地征用制度改革.     

The tax-welfare mix: explaining Japan's weak extractive capacity

Abstract

Despite having the highest level of public debt in the Organisation for Economic Co-operation and Development (OECD), higher than Greece or Italy, Japan has one of the lowest aggregate tax burdens of the advanced industrial democracies. This paper asks why Japan, once described as a strong developmental state, has had such a weak extractive capacity, an inability to raise revenues to confront deficits and public debt? In contrast to the existing explanations that focus on political institutions, partisan preferences, or economic globalization, this article argues that Japan's ‘tax–welfare mix’ – the combination of taxes and redistributive welfare polices – undermined the state's long-term capacity to secure adequate tax revenue. More than just a source of revenue, taxes can be used directly to achieve redistributive goals, such as targeting low taxes and exemptions to specific groups. This study shows how Japan's tax–welfare mix diminished its extractive capacity through three mechanisms: the political lock-in of a redistributive social bargain struck around low taxes, the timing and sequencing of its tax policy and welfare development, and the erosion of public trust, which undermined tax consent. Beyond offering a new theory of extractive capacity, the tax–welfare mix explains aspects of Japan's tax structure that defy existing explanations and contributes to our understanding of the capitalist development state by highlighting the redistributive political function of tax policy and its long-term impact on state capacity.     

Tax exporting,federal deductibility,and state tax structure

This paper studies the interaction between the federal and state tax systems during the 1980s and, in particular, considers how the Tax Reform Act of 1986 affected state tax structure. Using a panel data set on state governments over a nine-year period, I estimate tax share equations for six categories of taxes. I find that the state personal income tax is sensitive to changes in its tax price, but find a much smaller sensitivity to changes in tax prices for the general sales tax. I then consider various reasons why the sales tax does not exhibit a sensitivity to changes in tax price and consider the implications of these results for policymakers. The regression results suggest that different income groups are concerned with different tax instruments. Moreover, the results motivate a possible benefit approach to taxation at the state level. Linking taxes, about which a particular income group is most concerned, to services received by that group might generate additional political support for state tax systems during a time when many states are facing fiscal crisis.     

Distance,services, and citizen perceptions of the state in rural Africa

In most poor countries, basic services in rural areas are less accessible and of lower quality than those in urban settings. In this article, we investigate the subnational geography of service delivery and its relationship with citizens' perceptions of their government by analyzing the relationship between service access, satisfaction with services and government, and the distance to urban centers for more than 21,000 survey respondents across 17 African countries. We confirm that access to services and service satisfaction suffer from a spatial gradient. However, distant citizens are less likely than their urban peers to translate service dissatisfaction into discontent with their government; distant citizens have more trust in government and more positive evaluations of both local and national officials. Our findings suggest that increasing responsiveness and accountability to citizens as a means of improving remote rural services may face more limits than promoters of democratic governance and citizen‐centered accountability presume.     

Doubts and directions in Nigerian urban policy

The paper discusses urban policy and performance in Nigeria against the background of the development of ideas and institutions affecting the cities since the early colonial period. It critically examines the patterns of rural-urban relations, the policies for urban land-use control, town planning and municipal government, pointing out the inadequacies, especially the inefficiency of the machinery for implementing otherwise well-intentioned policies and programmes. The paper is especially critical of the lack of coordination and imagination in urban management, as well as the elitist orientation in urban planning and housing. It explores the potential value, as well as the limitations, of community self-help programmes for housing and sanitation in towns, in circumstances of worsening economic difficulties and drastic cutbacks in public funding and private investments. Finally, while endorsing the vigorous programmes now under way for rural development, the paper points out the futility of the current aggressive anti-urban back-to-land crusade, even in the legitimate concern to meet the basic needs of the predominantly rural majority.     

Tax Evasion from a Policy Perspective: The Case of the Motor Fuels Tax

In recent years, many state legislatures have proposed, considered, and adopted legislation intended to thwart fuel tax evasion. Despite the recent political activity of state legislatures to increase fuel tax compliance, there is relatively little research examining the evasion of excise taxes in general or the motor‐fuel tax in particular. This article examines the issues of fuel tax evasion from a policy perspective. We discuss the vulnerability of the fuel tax to evasion and examine how state legislatures in the southern region have responded to the tax evasion issue. We focus the examination on four major initiatives implemented at the federal level in four broad policy areas: tax administration, penalties and punishments, liability, and visibility and enforcement. These findings provide important insight for developing new strategies to enhance compliance to the fuel tax in particular and excise taxes in general. Furthermore, we discuss how issues of fuel tax compliance can be extended to other compliance issues such as Medicare fraud.     

The urbanisation of justice movements? Possibilities and constraints for the city as a space of contentious struggle

Have urban areas become strategic sites for the formation of justice movements? A justice movement is conceptualised as geographically extensive mobilisations that achieve a degree of territorial fixity at different spatial scales. It is proposed that a number of factors can encourage organisations implicated in this movement to make the urban arena a key front in their struggle to achieve justice. These factors include the intensification of urban inequalities, increased political opportunities resulting from the devolution of state capacities to sub‐national levels of government and new actors interested in pursuing innovative strategies and tactics. This hypothesis is tested through a comparison of movements in three different cities: Los Angeles, USA; Rotterdam, Holland; and Toulouse, France. The findings show that, despite the fact that new actors have begun to mobilise in these three cities around justice issues, they have experienced different degrees of territorialisation. The divergent outcomes are explained by the particular state–civil society power relations found in each of the cities. Thus, the paper concludes that, though the factors in our hypothesis may encourage actors to initiate urban justice movements, the degree of their territorialisation ultimately depends on local state–civil society power relations.     

从“救济”到“治理手段”？——当前农村低保政策的实践分析：以河南F县C镇为例

作为国家推行的一项福利政策，农村低保要实现对农村贫困人群的救助。然而，在现实中，低保政策经历了从“绝对贫困”到“相对贫困”、从以户为单位到以人为单位的扭曲和变通，以至低保政策在某种程度上成为了基层政权的一种治理手段，从而背离了政策的本意。事实上，低保政策执行中出现的种种问题既是监管力度不够及制度建设不到位所导致，更与税费改革后乡村组织的治理困境密切关联。在这个意义上，基层政权的治理状况既是保障低保政策能否顺畅执行的根本，也是一个现代国家基本治理能力强弱的重要体现。     

State Income Tax Treatment of the Elderly

The state and local tax treatment of the elderly varies significantly from state to state. In this article, we analyze the differences in effective tax rates for the state personal income tax for elderly versus non-elderly taxpayers. We find that in a majority of states, the average effective tax rate facing the elderly is significantly lower than that of non-elderly taxpayers. The consequences of this tax rate difference may impact long-term state income tax revenues as the elderly population continues to grow.     

State Government Expenditure Determinants and Tax Revenue Determinants Revisited

The primary aim of the research was to test the general hypothesis that many institutional and political variables affect fiscal outcomes; that the preferences of public officials, and the decision processes used to act on those preferences, matter. State government data (state only, not state and local) from 1980, 1985, and 1990 were used to specify state tax revenue and expenditure models. A previous (Merrifield, 1991) state tax revenue model identified many significant institutional and political variables, but it was based only on 1985 data (49 observations). The larger data set (147 observations), including better data for some of the variables, indicated that most of Merrifield's (1991) findings are robust. The state expenditure models facilitated a second test of the general institutional and political variable hypothesis, as well as the hypotheses about specific variables. The expenditure model also facilitated comparisons of expenditure and tax determinants, and comparisons with results published in the literature. Though there are some noteworthy differences between the expenditure and tax models, the expenditure models also supported many of the institutional and political variable hypotheses.